Why on-chain proof-of-stakes are dangerous, according to Michael Saylor.
Voices warning about the risks of technology in the cryptocurrency world are becoming increasingly relevant at a time when digital transparency has become a trend for many market participants. However, not all procedures adopted to this end are safe or effective.
In the midst of this discussion, Michael Saylor, one of the most influential figures in the world of cryptocurrencies and CEO of Strategy, has issued a clear and forceful warning: publishing proof of reserves on the blockchain, an increasingly popular practice, could pose a significant security threat both institutions and common users in the crypto ecosystem.
Thus, what many see as an innovation to increase trust can, for Saylor, open the door to serious vulnerabilities in the protection of data and digital assets.
Operate safely and protect your assets with Bit2Me.Michael Saylor's message adds to the growing controversy surrounding transparency in cryptocurrencies and practices that, while seemingly transparent, may conceal hidden risks that have not yet been fully understood by the community. Saylor's concern is not only about potential individual exposure, but also about the vulnerability of the entire system, which could be compromised by a trend that, in his view, has not yet achieved sufficient security guarantees.
The context of Michael Saylor's recent statements
Saylor made these statements during the most important conference of the year in the world of cryptocurrencies, Bitcoin 2025There, amid debates about privacy, trust, and regulation, the entrepreneur did not hesitate to harshly criticize a practice some institutions have adopted to demonstrate their Bitcoin and other asset reserves.
In general, the idea behind on-chain proof-of-reserves is simple: publish wallet addresses so that anyone interested can verify in real time whether a company has the declared amount of funds in its wallets. At first glance, this seems to offer transparency and accountability without the need for external audits.
However, what is theoretically an act of good faith can become a vulnerability when analyzed from a security perspective. When an institution reveals its wallet addresses, it is actually exposing information that can be exploited by hackers or malicious actors. For example, just by knowing the addresses, an attacker can devise strategies to attack those wallets specific or track movements, thus increasing the risk of theft or asset manipulation.
“Ask any AI to list risks, and you’ll get a book’s worth of vulnerabilities.”, Saylor said during his speech.
Saylor even went much further, explaining that, in reality, these reserve tests They do not provide a complete view of an organization's financial status.Because if only the funds in the wallets are shown, fundamental aspects such as liabilities, outstanding obligations, or liabilities that the company may have on its balance sheet are omitted. In other words, publishing only the balance in a wallet is a superficial measure that doesn't reflect the institution's true financial health, he asserted.
EXPLORE CRYPTO OPPORTUNITIES – GO TO BIT2ME LIFEOn-chain proofs of reserve are insufficient
Michael Saylor's concern is that true transparency in the financial and crypto world requires much more than publishing public addresses on the blockchain. To understand this, imagine a scenario in which a company publishes its cryptocurrency balance sheets but doesn't reveal its liabilities or debts. Public trust, in this case, would be merely an illusion if all aspects of that organization's financial health aren't verified.
This problem is further exacerbated in a context where the community and regulators are increasingly attentive to independent controls and audits. The tendency to publish public fund addresses can create a false sense of transparency that, in reality, can be easily manipulated or misinterpreted.
Based on this, Saylor emphasizes that, in the world of digital assets, simply displaying public balances on blockchains is not enough to guarantee that an entity is trustworthy.
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Security at the center of the debate
Saylor's argument is reinforced by highlighting that the exposure of public wallets not only puts institutions' assets at risk, but also endangers users and the system's economy as a whole. Security in cryptocurrency transactions has always been a priority, and in his opinion, the current trend toward sharing public reserves on blockchain contributes to weakening this aspect, leaving companies vulnerable to potential attacks or sabotage.
Saylor recommends looking for alternatives that prioritize confidentiality and protection, such as zero knowledge tests, which allows reserves to be verified without exposing sensitive data. However, he acknowledges that this technology is not yet widely adopted and that oversight and approval mechanisms by custodians, audits, and regulators must ensure that practices are secure and verifiable without compromising asset protection. He even stated that he was open to the possibility of publishing proofs of reserves if security innovations like ZK are implemented.
Saylor runs what is currently the largest public Bitcoin reserve company. According to data from Bitcoin Treasuries, Strategy owns 580.250 BTC, valued at over $63.200 billion at the time of writing.
BUY AND MANAGE YOUR BITCOINS WITH CONFIDENCE HEREMichael Saylor's words are an important reminder in an ecosystem where transparency is essential, but security must not be compromised. Furthermore, they tell us that true trust in the crypto world is not based solely on displaying balances on a public blockchain, but on implementing transparent, secure, and verifiable practices that protect both institutions and users.
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